Gift Calculator

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Church Gifts - Examples

Types of Property Gifts

Raw Land – Giving raw land can be especially useful.  While the property can take years to sell, the donor is immediately relieved of property taxes and any other expenses, while gaining on a valuable deduction.

Rental Property – Many people invest in rental property only to find one day that managing it has become a burden;  yet, selling would be too costly:  depreciation has lowered the cost basis and the capital gains taxes would be horrendous.  Giving the property can be a relief, while providing an alternative income for life given to a trust.

Commercial Property – The same principle applies to commercial property, which may often take months or even years to sell.

A Vineyard, Farm, Ranch or Personal Residence – Special rules apply to these assets, which make it possible for donors to "give" the property but continue to own it for the remainder of their lives.  Or, if they're ready to sell, they can donate it to a trust and get income for life.

Ways of Giving

The ways to give real estate are as varied as the types of real estate.  The most commonly used methods include the following:

Outright – An outright gift of property is the simplest way to give and provides the largest deduction.

Fractional Interest – Donors who are contemplating a sale of property can first give an undivided fractional interest to the church.  They avoid some gain on the sale, while receiving a charitable deduction.

Bargain Sale – Donors who own property a church wants to acquire can sell it to the church for less than its fair market value and receive a  deduction for the difference between purchase price and value.

Gift to Trust – Donors with highly appreciated property can give the property to a special trust.  The trust sells the property, without paying capital gains taxes, and the entire proceeds go to work to generate an income for the donor.

Retained Life Estate – Donors of a vineyard, farm, ranch, or personal residence can give a remainder interest in the property to the church.  They continue to use the property for the rest of their lives, while receiving a substantial income tax deduction for the value of the remainder interest.

A Few Guidelines…

The IRS imposes certain limits on the amounts that donors can deduct.  These limitations may mean the deduction must be spread over several years.

v     The property must be fee of debt.

v     Donors will need a qualified appraisal to substantiate their deductions.

v     The Foundation will need to conduct an environmental assessment of the property before it can be accepted.

All of this takes time.  Donors who want to be certain of a deduction in a current tax year should begin the process by Labor Day.